It's no secret that Wall Street is an essential part of the United States' overall economy. Without it, the infrastructure would be severely threatened. Knowing how important it is, you would think that Wall Street investors would have the public's best interest at heart, seeing as how if the system falls apart, the economy might not be too far behind.
Unfortunately, it has become clear in recent years that Wall Street definitely doesn't "have our backs," which makes it hard to know who to trust as you attempt to strengthen your retirement plan.
An Ongoing Issue
Investors defrauding their clients is a tale as old as time. Or, at least, almost. Although some clients have become more astute concerning certain practices and warning signs, a great number of them simply go about their daily business, unaware that a problem might be lurking around the next financial corner.
The problem seems to have gotten worse over the past few years. If not the frequency, at least the severity. Take the case of Bernie Madoff, for example. He defrauded millions out of investors, even the more savvy ones. Yet most people haven't taken any steps to protect themselves, because they trust the people they're working with. Arguably, so did Madoff's clientele.
If you want to protect yourself, now is the time, and no financial advisor worth his or her weight in gold will question your motives for doing so. After all, it is your retirement we're talking about here.
A Public Resignation
The financial world can be a cutthroat business. Just ask Greg Smith.
Greg started out as a summer intern for Goldman Sachs. He worked for the company for nearly two decades, and the job took him from New York to London, and he moved all the way up to an executive position. His growth with the company is what many employees would kill for. And what did he do? He quit.
The reason why he quit was covered in an op-ed piece he wrote for the New York Times. He used it as a letter of resignation and laid it all out very candidly. He explained that he had been given the opportunity to witness the inner workings of a large financial company and he didn't like what he had seen. He recounted how Goldman Sachs had once been a great company, but in recent years, he had witnessed a number of events where the focus had been taken off of client satisfaction and placed onto the company's bottom line. He also indicated that the financial giant could become what it was once again, but as long as they continued down the path they was currently on, he wanted no part of it.
Who Can You Trust?
Seeing as how companies like Goldman Sachs and investors like Bernie Madoff haven't had the clients' best interest at heart (in the case of Madoff, that is a gross understatement), it is important that you take steps to protect yourself. Don't simply choose a financial company to advise you in your retirement plans because of name recognition. Get a feel for how they do business and how they treat you. If you're especially skittish, start with a small investment and grow your portfolio as you gain confidence in their ability. And don't be afraid to get a second opinion from an outside source who can analyze your financial strategy and make sure that the course your advisor has set up is a wise one.
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